The bite looks to kill them as you stab your bone-wings into them as you do it. It's one of the ways to increase skill tree progress.
I believe he was referring to the vampire feeding animation for "normal form" vampires, which is seen inside a shop in the Dawnguard trailer.
Game breaking definitely. Brings up more problems than it really needs, to be honest. Even if Bethesda could implement it into one piece of DLC, I'd much rather that they didn't. I'm perfectly fine sneaking around the foolish mortals.
It seems entirely possible that they'll add in werewolf encounters, which I really hope that they do. After all, they're adding the werewolf perk tree. Why not make a couple roam the lands of Skyrim? It would also be a good way to be infected with lycanthropy without having the join the Companions. Imagine they're faces if you joined and you were already a werewolf.

Good point. I always thought it was silly how they have tons of loading screens that talk about real dangers, creatures, encounters, and skills in the game, but when they refer to werewolves, there are no other examples of them aside from you and the contained ones in the Companions questline. Very odd.
I'm hoping perhaps they added (or will add) a simple "werewolf attack" code as a random wilderness/road event that happens only at night. That would be very cool and would solve that issue which is so annoying from a lore perspective. Also, a good gameplay addition all around, especially since there could be different leveled werewolves, just as there are in the Companions questline, so they would be of varying difficulty as the PC levels up.